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It is possible to transform Australia’s abundant but undervalued natural resources into high-tech, low-emissions carbon products through appropriate investment in research and development.

Australia has an abundance of natural resources that could be transformed into high value carbon products, creating the basis for a new generation of high-tech ‘green’ processing industries. Australia’s largest solid carbon resources are its deposits of bituminous coal and lignite, which have historically provided cheap, reliable electricity and important export revenue. For the sake of the environment, it is necessary to wind back the way we currently use our lignite. The economic cost of this can be mitigated by developing smarter, carbon-neutral new industries that produce higher value products from smaller quantities of lignite.

Australia is also rich in other carbon-rich wastes that are currently afforded little value but could be upgraded to high value products. These include biomass wastes, papermaking waste lignin, used car tyres, waste plastics, power station fly ash, and captured carbon dioxide emissions. 

The technologies needed to upgrade these resources include primary processes such as gasification, pyrolysis, extraction and CO₂ capture and recycling, and additive processes such as polymerisation, 3D printing, laser etching and fibre spinning. These technologies can be further supplemented with emerging developments in renewable energy and hydrogen.



Global economic growth with a smaller carbon footprint requires investment in innovation across a broad range of sectors, including agriculture, construction, fuels and chemicals, polymers, transport, hydrogen production and utilisation, food processing, renewable energy and CO₂ recycle. Development of these opportunities will require major investment over a long period of time, and active management from research concept to market appraisal. 

However, there are a number of significant technical, economic and social challenges to achieving this goal.

  • The skills base required to support the creation of new low-emission carbon-based products and processes is not well developed in Australia. Skills capacity is a major issue for current and future carbon-based industries throughout the world.

  • Private sector capacity and capability, including cash availability for R&D, is generally limited in Australia.

  • Some sectors of the public are opposed on any research on new uses for bituminous coal and lignite. Other potential carbon resources are currently regarded as waste products with little value. Securing funding for such research can be a challenge. 

  • Development of low-emissions carbon technologies is dependent on the availability of some form of CO₂ capture and storage. In Victoria, the CarbonNet and HESC projects are paving the way for large scale production of hydrogen from lignite, with captured CO₂ transported by pipeline for geological storage. These developments will catalyse the development of low emissions industries in the Latrobe Valley, but are not expected until the late 2020s. However, this provides sufficient time for the development of complementary new carbon-based products and processes. 



Lignite is an example of an undervalued carbon resource that has the potential to be upgraded to a wide range of carbon-based products. Historically, Victoria’s power industry has been based on the inefficient combustion of lignite containing two-thirds water, earning it public opprobrium as ‘dirty brown coal’. However, dried Victorian lignite is a very clean source of carbon, with an internationally low level of mineral impurities. The potential for upgrading Victorian lignite is further enhanced by the current development of CO₂ capture and storage infrastructure in the Latrobe Valley. In principle, there is no reason why the Latrobe Valley could not one day be home to an industrial complex of high-value, low-emissions carbon manufacturing industries.

For example, dried lignite can be gasified to produce synthesis gas, or syngas, a mixture of hydrogen and carbon monoxide. Syngas can be further reacted with water to produce more hydrogen and carbon dioxide, as will be done in the HESC Project. Alternatively, it can be converted to a range of commodity chemicals and monomers for the plastics industry. Dried lignite can also be converted to specialty carbon products, fuels and agricultural products. 

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It is counterintuitive, but lignite (and/or bituminous coal) has the potential to underpin a thriving renewable energy industry in Australia. Lignite can be used as a heat source in the production of the glass panels used in solar collectors. Lignite can be used as a reducing agent in the production of steel, used in solar panels and wind turbine towers. Lignite can be converted into carbon fibres, used in wind turbine blades and lightweight transport components. Lignite can be converted into plastics and graphene oxide, which can be used to produce flexible solar panels, lithium ion battery electrodes, printable batteries and supercapacitors. Lignite can also be converted to hydrogen, which can be used in fuel cells and hydrogen turbines, and further upgraded to a host of chemical products.

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The technologies used to upgrade lignite may also be used to produce value-added carbon products from biomass wastes, papermaking waste lignin, used car tyres and waste plastics. There is strategic value in supporting the development of carbon upgrading technologies for a spectrum of feedstock materials, to maximise the potential for successful commercialisation.




Production of low-emissions carbon products from such raw materials will necessarily require the use of CO₂ capture and storage (CCS). Despite the detractors of CCS, the Global CCS Institute’s The Global Status of CCS report states that CCS has been working safely and effectively for 45 years.  In Victoria, the CarbonNet Project and CO2CRC are at the forefront of CCS development. 

The Victorian government and ANLEC R&D have been substantial funders of CCS R&D through BCIA, having funded five (5) pilot scale trials of different CO₂ capture technologies in the Latrobe Valley. This has made the Latrobe Valley a hub of innovation in CO₂ capture technologies. This research is relevant to other heavy emitting industries such as cement manufacture, aluminium refining, papermaking and biodiesel production.

The concept of ‘CO₂ recycling’ is being developed overseas as a way to further reduce the cost of CO₂ capture, by generating additional revenue through conversion of some of the captured CO₂ into useful, high value products. This is an area of active development and significant investment in the EU and USA. ACI identified opportunities to transform waste CO₂ into plant food, construction materials, methane, methanol and bioplastics, amongst others. These could be the basis for new manufacturing industries in the Latrobe Valley, creating skilled, high paid, interesting, high-tech jobs. 

Conversion of CO₂ into value-added products requires an input of energy, which may be in the form of hydrogen or renewable energy, or both. The HESC project is paving the way for production of inexpensive CO₂-free hydrogen in export quantities, while hydrogen produced from renewable electricity will create many niche opportunities for CO₂ recycle.   

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